Who is unreasonable? Me or friend for saying that is the reality for many so suck it up?

[brownpaperbag2]

A friend lives in a very nice 3 bed semi in a great location, lovely commuter village in South East with good schools etc. she pays £370 a month for her council property, where as mp the average for a 3 bed semi to rent here is £1400 a month.

I have always told her she is lucky. She has lived there 12 years and has 2 cars, goes abroad every year, pays for private tuition etc. her husband earns £34,000 a year and she earns £4000 a year part time school hours. Her husband has just gone for a promotion to earn himself £45,000 a year.

This years budget means she is likely to have to pay full market rent, thus more than tripling her rent. She is freaking out and saying that it isn't fair as her family will suffer. She has 2 children and pays for tennis lessons, tuition, football club etc

I said that this is what other families have to pay, including someone 3 doors up in the exact same house so why should she pay less and have a better lifestyle than her neighbours who also have 2 children and both work full time.

Clearly it fell on deaf ears.

In what kind of bizarre society does a house 'worth' £400k+ cost £300+pcm to live in?

Something is deeply wrong in a system that has anomalies like that.

Her house's 'value' is a bubble waiting to burst and ime ha rents on desirable 3 bed houses are more like £600pcm so I'm wondering why hers is so low?

Tobysmum a lot of "council housing" today is actually owned by private LLs who lease to the council on a slightly below market rent. The LL gets a guaranteed income with no breaks for a certain amount of years.

How about if they were kept to generate income at market rates the majority people who would choose to live in them would be people receiving HB - therefore subsidised.
Yes they could sell them but that money would run out very quickly.

I am in social housing and pay more than £370 for a two bed house.

Private rents here are around £800 a month for the same size.

I couldn't afford that as I cannot work at present. In a private rented place I'd be costing the tax payer double what you do now in housing benefit.

yes exactly Oliversmum which is why the picture of 'subsidy' is so confusing. It depends on lots of things. Also if the rent from the private landlord had been agreed 5 years ago it would be a lot lower than market rent probabky anyway.

AndNowItsSeven and Alfieisnoisy my point is that below market rent or HB is essentially the same subsidy as you both seem to agree. It therefore seems reasonable that those who would not get HB should pay market rent. The ultimate result of this should be that rents and house prices decline and housing becomes more affordable. Government subsidy, whether in rent or HB will also consequently fall.

They are subsidised. They could be sold to pay down the national debt or kept and used to generate income for UK plc at market rates.

What absolute bollocks.

You are just determined to see subsidy where there isn't one if your argument is "oh well, we could sell it and realise some quick cash."

Bathtime where I live the Op's friend could buy a similar property outright for the quoted discount she would get on the purchase price.

I am equally incredulous at your inability to see the cross subsidy between regions of the UK from the poorest to the richest.

where I live the Op's friend could buy a similar property outright for the quoted discount she would get on the purchase price

So what?

That is irrelevant to the argument as to whether her rent is subsidised.

No howaboutbelow market rent is not subsidised if tenants are paying all their own rent.
It is only the HB side of things that creates as subsidy. Also it costs the tax payer a lot less to pay HB for council/ HA properties than private ones.,

I believe the principle of this is right, and people shouldn't be in a postion where their rent is subsidised but they can afford foreign holidays and tennis lessons. That said, Its quite a dramatic change. I think the Govt should have phased it in over a longer period so people could get used to living more within their means rather than hit them with £700 per month extra

I think you are being a bit mean towards your friend tbh. The Government keeps going on about making work pay and rewarding hard work.

I have been working 2 jobs and studying at home to try and get a better job. If it pays off really well I should be better off right? A reward so to speak for hard work. The job I'm interviewing for next week if I get it I could earn an extra 14k ( probably won't). My commute will cost me an extra 3k per year and the longer commute will mean and extra 2.5 on childcare. If I was also in your friends position of having to find another 12360 per year rent then my reward for pushing my self to improve my lot would be being almost 3.9k worse off. We are only just managing to not panic about keeping a roof over our head and food on the table so it would feel a he'll of a lot more like punishment for daring to try and get above my station as adjustment to that for us would involve adults skipping meals.

The house in the Op would buy 5 similar ones where I live. Each would rent out in the social or the private sector for about £370 pm, being the non market rent in the Op. Wages in my area for BT engineers are similar to those quoted by Op. This means in my area the Op's friend could rent or buy at the market rate for her current cost and 4 other families could be housed. The government could charge itself rent on interest on capital invested and pay it out in HB or house these families for free or charge them rent. Not that interested in arguing about word definitions but there is a cost to discounted rent.